{"id":7394,"date":"2024-11-06T07:09:28","date_gmt":"2024-11-06T07:09:28","guid":{"rendered":"https:\/\/finderica.com\/the-little-things-matter-in-investing-and-in-baseball-too\/"},"modified":"2024-11-06T07:09:28","modified_gmt":"2024-11-06T07:09:28","slug":"the-little-things-matter-in-investing-and-in-baseball-too","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=7394","title":{"rendered":"The \u201cLittle Things\u201d Matter in Investing (and in Baseball, Too)"},"content":{"rendered":"
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You\u2019ve probably heard enough about the election, so I\u2019m not going to comment any more on what it may mean for your portfolio or anything like that. You can read what I wrote about it here if \u2013 for some reason \u2013 you can\u2019t get enough of Harris and Trump.<\/p>\n

Instead, I\u2019m going to talk about something way more important today.<\/p>\n

Baseball.<\/p>\n

I grew up 20 minutes from Yankee Stadium and have been a die-hard Yankees fan my whole life. I even worked for the Yankees organization for a season. So watching them lose the World Series to the Los Angeles Dodgers last week was tough.<\/p>\n

The Dodgers are one of the most consistent, well-managed teams I\u2019ve ever seen. They don\u2019t make many mistakes, and they do all the \u201clittle things\u201d right.<\/p>\n

In a lot of ways, they actually remind me of a successful investor.<\/p>\n

Hear me out.<\/p>\n

When the Dodgers\u2019 Shohei Ohtani, who\u2019s one of the best players in baseball (after Yankees center fielder Aaron Judge, of course), went down with an injury in Game 1, it rendered him ineffective for the rest of the series.<\/p>\n

But the Dodgers didn\u2019t miss a beat. They stuck to their game plan, won the first two games of the best-of-seven series, and ended up closing out the Yankees in five games.<\/p>\n

The most important point in the series \u2013 and the moment when I was most impressed with the Dodgers \u2013 came in the fifth inning of Game 5.<\/p>\n

The Yankees were winning 5-0 when Aaron Judge inexplicably dropped an easy fly ball.<\/p>\n

A few minutes later, sure-handed shortstop Anthony Volpe made a bad throw, which loaded the bases for the Dodgers.<\/p>\n

After the next two Dodgers batters struck out, Mookie Betts \u2013 a terrific player and former MVP \u2013 hit an easy ground ball to Anthony Rizzo, the Yankees\u2019 first baseman. Rizzo assumed the pitcher, Gerrit Cole, would cover first base, so he prepared to throw the ball to Cole for the out. But Cole, thinking Rizzo would run to first himself, slowed down.<\/p>\n

Meanwhile, Betts, knowing how high the stakes were, sprinted down the line \u2013 even though many players don\u2019t run particularly hard to first base after hitting a routine ground ball. Rizzo, realizing that he\u2019d need to get Betts out himself, hustled toward first base, but Betts beat him there, giving LA a run and keeping the Dodgers\u2019 inning alive.<\/p>\n

The Dodgers ended up scoring four more runs in the fifth inning to tie the game, and they went on to clinch the series a few innings later.<\/p>\n

There were numerous big hits, clutch pitches, and strong defensive plays that contributed to the Dodgers winning the game and the series. But they won that game because Mookie Betts didn\u2019t give up on an easy ground ball. He ran hard the whole way.<\/p>\n

It\u2019s rare for a team to win a championship without doing those little things right. Home runs are exciting, but the small things that don\u2019t make it into the highlight reels \u2013 like taking an extra base, making the right throw, or running hard when others might not \u2013 are what ultimately lead to putting a championship ring on your finger.<\/p>\n

Investing is the same way.<\/p>\n

Sure, we all want those \u201chome run\u201d investments, where one of our stocks goes up hundreds of percentage points. It\u2019s certainly exciting when that happens.<\/p>\n

But the way to help your portfolio win a \u201cchampionship\u201d \u2013 that is, provide you with the nest egg and\/or income that you need in order to live the life you want \u2013 is by making sure you do the little things.<\/p>\n

So what are those little things?<\/p>\n

1. Stay invested.<\/strong><\/p>\n

The most important factor in investing success is not which stocks you pick. It\u2019s how long you stay invested. The longer you\u2019re invested, the better results you\u2019ll have.<\/p>\n

In last week\u2019s Oxford Income Live<\/em>, a live monthly video discussion with Oxford Income Letter<\/em> subscribers, I talked about the stock market\u2019s returns during each presidential administration going back to President Eisenhower. The top five performances were for two-term presidents (and, notably, it was a mixture of Republicans and Democrats). Since the market goes up over the long term, it makes sense that it would do better over a random eight-year period than a random four-year period.<\/p>\n

2. Keep putting money to work.<\/strong><\/p>\n

The hardest thing to do is to keep buying when the market is falling. Yet that\u2019s exactly the action you should take.<\/p>\n

You\u2019re never going to time the market perfectly and know when the bottom has just occurred. But if you invest at regular intervals \u2013 whether that\u2019s monthly, quarterly, twice a year, etc. \u2013 you will ensure that you\u2019re buying during both bull markets and bear markets, and the prices will even out over time. Importantly, you also won\u2019t miss out on big bull runs that you never saw coming.<\/p>\n

3. Manage your risk.<\/strong><\/p>\n

Use trailing stops so small losses don\u2019t become big losses. Also, position size accordingly. Don\u2019t have too much exposure to any one stock. The Oxford Club recommends that you invest no more than 4% in any one position \u2013 and if you\u2019re taking a big swing on a speculative trade, you may want to keep your position size even smaller.<\/p>\n

Be Like the Dodgers<\/strong><\/p>\n

As a Yankees fan, I\u2019m already saying, \u201cJust wait till next year!\u201d, but as investors, we don\u2019t have that luxury. Every year that goes by without us doing the little things costs us money and shrinks our portfolios.<\/p>\n

It pains me to say this, but be like the Dodgers and do the little things right.<\/p>\n

Good investing,<\/p>\n

Marc<\/p>\n

P.S.<\/strong> What other \u201clittle things\u201d can you think of that are essential to being a successful investor? Let me know your thoughts in the comments below. (And if you\u2019d like to offer me your condolences about the Yankees while you\u2019re at it, I wouldn\u2019t mind.)<\/a><\/p>\n

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